Porsche CEO talks about Porsche's electrification, role in VW group, influence of corona

Interview with Porsche CEO Oliver Blume

A while ago, there was an article that I interviewed Porsche CEO Oliver Blume about various things, so I took a look.

This interview was conducted at the Porsche headquarters in Stuttgart while thoroughly implementing social distance.

Less than,QIs a question from the interviewer,AIs the answer of Mr. Oliver Blume. :

Oh, that ... this is long, so please take it even when you're free ^^

Q: Porsche made an electric car called Taycan last year. What's next?

A: First, we took a step toward a major transformation with the Taycan model. More changes will continue in the coming years. Macan, a fully electric vehicle, is the next big change. In 2025, the car of about 50% provided by Porsche will be electrified. Most of them will be fully electric sports cars, and the rest will be sporty plug-in hybrid cars.

Q: What is your share of electricity so far?

A: It feels good. In Europe, one-third of the cars delivered last year were electrified models. Half of them are fully electric vehicles and half are hybrids. This is an increase of 60% from the previous year, and Porsche's electrification strategy is very successful.

We succeeded in giving the electric model the sportiness of Porsche, and despite the influence of the coronavirus, we were able to achieve the goal of selling 20,000 Taycans in 2020. The feedback from customers and experts is very good, and I want you to experience Taycan anyway. (← Oh, I wondered if this translation is really okay (laughs)? Original → It is important to experience the vehicle.)

Q: What is your long-term plan for 2025?

For us, the key is not how many cars were sold, but that Porsche is an exclusive sports car. However, it is also true that more than 300,000 cars will be sold annually.

Without Corona, it could have been achieved by the end of 2020, but we also decided to set a market cap (approximately 0.3% share of the global market). We plan to continue to provide figures based on this upper limit of market share.

Q: Is there any comparison with Tesla?

I think Tesla's development is very good. Elon Musk is a cool guy and a great entrepreneur. Tesla is pursuing another strategy and wants to sell numbers. That is why we are building factories all over the world. Porsche keeps the number small and keeps its exclusiveness. We will fulfill each customer's dream.

Q: Did Taycan get Tesla customers?

done. However, Tesla was not the benchmark for us when we developed the Taycan. Because we focus only on our products anyway.

An important guideline for Porsche was that even an electrified Porsche can run like Porsche 911, which is what we want our customers to expect. Is.

Q: Why is the VW Group using as many as 20 different formats of battery cells?

Currently, there are many battery types, which are already under consideration. (The reason why many types of batteries are mixed in the VW group) When I started planning electric vehicles a few years ago, I didn't have much technical experience in this area, so I took various approaches. Due to the development of. With our knowledge now, we will look to the future and reach correct conclusions.

Q: What exactly does that mean?

The VW Group standardizes geometric battery formats in various performance ranges based on the chemistry within the cell.

Basically, it is a cost-optimized volume battery, and there are performance batteries and high-performance batteries for the high-end segment.

Porsche is working on developing high power, energy density batteries, especially for cars for sports cars. The battery is tomorrow's combustion chamber.

Q: When will it be implemented?

We believe that a period of about five years is realistic for implementing this concept, and we have already decided on strategies related to it.

To be honest, due to the lack of capacity in the industry as a whole, there are major challenges to overcome in the area of battery cells over the last few years.

Q: How has Porsche's role in the entire VW Group evolved?

Porsche has been a member of the VW Group for 10 years. A lot of very positive things are happening during this time.

When purchasing parts, etc., the economic benefits of the large scale of the group are received, and the VW Group benefits from Porsche in return.

Over the last decade, our performance has quintupled and has evolved from a junior partner for the VW Group to now the most profitable brand in the group. At the same time, this is also a big responsibility, and what Porsche produces will support the transformation of other brands within the group. True teamwork.

Q: Is Porsche the other benchmark within the VW Group?

Porsche offers cutting-edge technology as a service provider to other brands. For example, innovative electrified models. Taycan provides the technology base for Audi's eTron GT, and Bentley's Continental, Convertible, and Flying Spur hybrid platforms are from Porsche Panamera.

In addition, it works for the group at the strategic level. Because it is a small manufacturer, we can act swiftly and boldly. Porsche began to switch to electric vehicles at a very early stage and is the driving force of the group strategy.

Q: What is Porsche's situation with coronavirus?

You need to act with a strong will. Coronavirus is a stress test for everyone, and being healthy is of utmost importance. In the automotive industry, it's clear who has done well before and after this pandemic.

In our case, we are doing it in this corona situation by day-to-day crisis management. It was also very important for Porsche to support society with the global Porsche helps program. Clear leadership, collaborative teamwork, and true fighting spirit are required more than ever.

Q: Did Porsche respond quickly enough?

did. It is important to take prompt action, and it is necessary to take action that actually produces an effect. In the case of Porsche, for example, the break-even point could be further lowered in terms of costs. At the same time, Porsche's sporty and innovative model range has given us a tailwind. As a result, we are doing very well.

We are confident that we can achieve double-digit profits even under the influence of the coronavirus, which we have been fighting all year round.

Q: When the pandemic (Corona) is over, do you have a plan to achieve a profit margin of 15% again?

15% will continue to be a strategic goal. Even if it is an ambitious goal in the changing times.

We are investing heavily in electric mobility, digitalization, and improving employee quality, and the cost of batteries (material costs) is high.

Since electric vehicles are developing at different paces in various countries around the world, we may continue to produce gasoline and hybrid vehicles, which will cost a huge amount of money. So today's revenue of 15% is as valuable as the old 20%.

Q: Sales have surpassed competitors just by a 3% decrease, and without Corona, Porsche would have grown considerably last year.

I think so. Last year, it sold more than 272,000 cars, with sales of only minus 3% year-on-year. I think it was a great achievement for our team in this difficult situation.

The shutdown by Corona had the same impact on other companies, but Porsche had to stop production for six weeks, and in some areas it had to close Porsche dealers for longer periods of time. .. As a result, it was not possible to achieve the planned annual sales of 10% or more in the end.

Reference article:New car sales in Porsche (overall) in 2020

Q: I think it will be necessary to reduce costs in order to invest in new electric vehicles and digitalization. Do you have any specific plans?

Our approach goes far beyond cost savings. Three years ago, we launched a comprehensive profitability program: leveraging efficiency and additional sources of revenue.

The positive effect of this has already helped us at the time of Corona. As a concrete figure, it should generate a total revenue of 10 billion euros by 2025 and then 3 billion euros a year thereafter. Already, we have made effective progress, deploying more than 2,500 individualized measures. Profitability programs are already part of our daily work.

Q: What is a concrete example?

One example is digitalization in vehicle development. Until now, it cost millions to prototype for testing, but now much of this development work is done digitally. Being digital has resulted in significant cost savings, even though development is as good or better than ever.

We are also trying to use more standard components on all production lines where they are not important to the identity of the model they produce.

Q: Will there continue to be a tremendous number of options?

I think we will eliminate options that are rarely requested by customers, but options for cars are what we value.

It feels like a good restaurant menu, and customers are confused if there are 100 different dishes on the menu, but in a fine dining restaurant there are only 10 but very high quality dishes on the menu. We are such the latter in the car industry.

In addition, customers can get the vehicle they want through the Porsche Exclusive Manufaktur.

Q: Does Porsche in 2021 feel like a break?

I don't have to worry about that. Last year we announced the new 911 and Taycan variants. These were great achievements for our team, and now customers can choose the vehicle they want from a wider range of products.

In addition, some good surprises are waiting for us this year, and we will make a strong leap in the following year.

Q: Are you worried about having to move Bentley under Audi?

No, Bentley is a success story for me. Over the last three years we have completely improved Bentley. The Bentley team has done a very good job and, with our support, made € 300 million from 2018 to 2019.

Bentley is profitable again and was able to finish in the black even in the 2020 Corona situation. The product strategy is set for the future, and Bentley will prepare for sustainable double-digit profits and push forward strongly for the future.

Q: But it's sad that Bentley has left, right?

What Porsche should do is over. Bentley is better off with Audi in the premium luxury segment than with Porsche in the sports car segment. That's why they have no resistance to moving to Audi and are happy separation.

Q: Porsche is also involved in Synthetic Fuels, so it also has a special role within the VW Group, why?

In the future, there is no substitute for electric vehicles to achieve the CO2 target quickly and sustainably. However, there are currently more than 1 billion vehicles with internal combustion engines around the world.

Porsche thinks about sustainability comprehensively. We want to be a pioneer in demonstrating that synthetic fuels are an environmentally friendly approach for cars already on the road.

Reference article:
◆Porsche to research and develop synthetic fuel eFuel
◆Porsche and Siemens Energy to develop eFuel with partner companies

Q: Is it possible to put a reasonable price on synthetic fuels?

At the moment, the cost is still about $ 10 per liter. In the future, if we can secure an appropriate quantity, it may be possible to reduce it to less than $ 2 per liter in about 10 years.

For Porsche, I think this synthetic fuel will create the future of our icon Porsche 911 ... as a combustion engine or a very sporty hybrid model.

This means that we can still drive such cars for years to come, which we believe will make our customers and fans happy.

The desire to keep the Porsche 911 alive with a combustion engine

Huh. It was a long interview, but thank you for your relationship ^^

As far as this is seen, at the moment Porsche is still focusing on the development of electric vehicles in consideration of future environmental problems and regulations, but at the same time, it is the development of synthetic fuel that is still more focused, anyway Porsche I feel like I've been trying to keep the 911 (or other models) alive with a combustion engine.

I'm still not sure what the synthetic fuel will be like (whether it's made well, infrastructure, whether it can be reduced to a price that people can actually use, etc.), so it's still a perfect company. I don't think I can say anything, but I want you to do something for the future.

Porsche, do your best! !! Thank you for your continued support of 911 in the future. (... I'm sorry for the light support (laughs). I really hope that the 911 will continue as a gasoline car !!).

Source:(Official) Blume: “The pandemic reveals who's done their homework”